VILLAGE OF WEST BARABOO, WISCONSIN FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR'S REPORT. Year Ended December 31, 2011

Transcription

1 FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR'S REPORT Year Ended December 31, 2011 Johnson Block & Company, Inc. Certified Public Accountants 1315 Bad Axe Court; P.O. Box 271 Viroqua, Wisconsin (608) Fax: (608)

2 Contents Page Independent Auditor's Report Basic Financial Statements: Exhibit I: Government-Wide Statement of Net Assets Exhibit II: Government-Wide Statement of Activities... 5 Exhibit III: Balance Sheet - Governmental Funds Exhibit IV: Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds and Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities Exhibit V: Statement of Net Assets - Enterprise Funds Exhibit VI: Statement of Revenues, Expenses and Changes in Net Assets- Enterprise Funds Exhibit VII: Statement of Cash Flows (Direct Approach) - Enterprise Funds Exhibit VIII: Statement of Net Assets - Fiduciary Fund Index to Notes to Financial Statements Notes to Financial Statements Required Supplemental Information: Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund other Supplemental Information: Statement of Revenues - Budget and Actual- General Fund Statement of Expenditures - Budget and Actual- General Fund Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual - Debt Service Fund Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Tax Incremental Financing District Detailed Statement of Operating Revenues and Expenses - Enterprise Funds... 50

3 » Johnson... Block AND COMPANY, INC Certified Public Accountants 1315 Bad Axe Court... p.o. Box Viroqua, Wisconsin TEL FAX INDEPENDENT AUDITOR'S REPORT To the President and Members of the Village Board Village of West Baraboo Baraboo, Wisconsin We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Village of West Baraboo, Wisconsin, as of and for the year ended December 31, 2011, which collectively comprise the Village of West Baraboo, Wisconsin's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Village of West Baraboo, Wisconsin's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United states of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the Village of West Baraboo, Wisconsin, as of December 31,2011, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1.B. to the basic financial statements, the Village of West Baraboo, Wisconsin, adopted the provisions of Governmental Accounting Standards Board Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" as of January 1, Quality service tbrougb our commitment to clients and staff

4 Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 44 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplemental information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Management has not presented a management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Village of West Baraboo, Wisconsin's financial statements as a whole. The other supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. ~UA.DM ~cllct-~ II~{L. Johnson Block & Company, Inc. \ cj Viroqua, Wisconsin June 8,

5 BASIC FINANCIAL STATEMENTS

6 EXHIBIT I VILLAGE OF WEST BARABOO, WISCONSIN GOVERNMENT-WIDE STATEMENT OF NET ASSETS As of December 31, 2011 Assets Governmental Activities Primary Government Business Type Activities Current assets: Cash and cash equivalents $ 1,115,693 $ 231,700 Cash and investments 208,792 Receivables: Customer 109,389 Taxes 1,068,478 Special assessments 1,564 Other 27,991 Internal balances (450,028) 450,028 Inventories and prepaid items 27,615 Total current assets 1,735,707 1,055,515 Total $ 1,347, , ,389 1,068,478 1,564 27,991 27,615 2,791,222 Noncurrent assets: Restricted assets: Cash and investments 218,324 Land 75,000 Land improvements 79,045 Buildings and building improvements 329,151 Machinery and equipment 846,239 Infrastructure 4,359,607 Utility plant 6,305,723 Less: Accumulated depreciation (2,125,007) (920,200) Unamortized debt issuance expense 37,741 45,730 Deferred assets 73, ,736 Total noncurrent assets 3,675,479 6,026, ,324 75,000 79, , ,239 4,359,607 6,305,723 (3,045,207) 83, ,439 9,701,792 Total assets $ 5,411,186 $ 7,081,828 $ 12,493,014 See accompanying notes to financial statements. -3-

7 GOVERNMENT-WIDE STATEMENT OF NET ASSETS As of December 31, 2011 EXHIBIT I (CONTINUED) Liabilities Current liabilities: Governmental Activities Primary Government Business Type Activities Accounts payable $ 39,500 $ 25,830 Accrued liabilities: Interest 24,524 Other 1,468 Payable from restricted assets: Accrued interest 19,387 Current portion of long-term obligations 136,700 Deferred revenue 1,139,903 Advances due to chamber 969 Note payable 524 Current portion of long-term obligations 244,818 Total current liabilities 1,451, ,917 $ Total 65,330 24,524 1,468 19, ,700 1,139, ,818 1,633,623 Noncurrent liabilities: Long-term obligations, net of current portion 1,664,200 2,521,611 Total noncurrent liabilities 1,664,200 2,521,611 Total liabilities 3,115,906 2,703,528 4,185,811 4,185,811 5,819,434 Net Assets Invested in capital assets, net of related debt 1,660,535 2,727,212 Restricted for special purposes 198,937 Unrestricted 634,745 1,452,151 Total net assets 2,295,280 4,378,300 4,387, ,937 2,086,896 6,673,580 Total liabilities and net assets $ 5,411,186 $ 7,081,828 $ 12,493,014 =============== See accompanying notes to financial statements. - 4-

8 EXHIBIT II VILLAGE OF WEST BARABOO, WISCONSIN GOVERNMENT-WIDE STATEMENT OF ACTIVITIES Year Ended December 31,2011 Functions/Programs Governmental activities: General government Public safety Public works Health and social services Culture and recreation Conservation and development Interest and fiscal charges Total governmental activities Business-type activities: Water and sewer Total business-type activities Total Charges Capital for Grants and Government Expenses Services Contributions Activities $ 181,175 $ 14,649 $ 3,567 $ (162,959) 234, ,488 (230,527) 336,529 2, ,070 (212,965) 20,180 7,005 (13,175) 29,915 2,402 (27,513) 121,922 (121,922) 123,458 (123,458) 1,047,669 27, ,125 (892,519) 580, , , ,746 $ 1,628,600 $ 765,771 $ 128,125 (892,519) General revenues: Property taxes: General purpose 847,344 Tax incremental financing district 238,333 Other taxes 140,012 State and federal aids not restricted to specific functions: State shared taxes 73,397 Interest and investment earnings 5,616 Miscellaneous 10,108 Transfer: Tax equivalent 73,583 Total general revenues and transfers 1,388,393 Primary Government Business-Type Activities $ $ 157, , ,815 4,953 (73,583) (68,630) Total (162,959) (230,527) (212,965) (13,175) (27,513) (121,922) (123,458) (892,519) 157, ,815 (734,704) 847, , ,012 73,397 10,569 10,108 1,319,763 Change in net assets 495,874 89, ,059 Net assets - beginning of year 1,799,406 Net assets - end of year $ 2,295,280 4,289,115 $ 4,378,300 $ 6,088,521 6,673,580 See accompanying notes to financial statements. -5-

9 EXHIBIT III VILLAGE OF WEST BARABOO, WISCONSIN BALANCE SHEET GOVERNMENTAL FUNDS As of December 31,2011 With Comparative Totals as of December 31, 2010 ASSETS Major Funds General TIF District Cash and cash equivalents $ 1,115,693 $ Receivables: Taxes 851, ,292 Special assessments 1,564 Due from other funds 491,771 Advances to other funds 307,501 Other assets and debits: Deferred debits 73,703 Total assets $ 2,841,418 $ 217, Totals $ 1,115,693 1,068,478 1, , ,501 73,703 $3,058, Totals (Memorandum Only) $ 1,482,207 1,085,694 1, , ,501 70,212 $ 3,181,963 LIABILITIES Accounts payable $ 39,500 $ Payroll taxes payable 1,468 Due to other funds 86,798 Deferred revenues: Assessments 1,564 Property taxes 847, ,292 WDF loans 73,703 Advances due to other funds 1,162,502 Advances due to chamber 969 Long-term obligations: Note payable 524 Total liabilities 965,072 1,466,592 $ 39,500 1,468 86,798 1,564 1,064,636 73,703 1,162, ,431,664 $ 46,271 1,982 1,439 1,085,677 70,212 1,282, ,488,607 FUND EQUITY Fund balance: Restricted 307,501 Unassigned (deficit) 1,568,845 (1,249,300) Total fund equity 1,876,346 (1,249,300) Total liabilities and fund equity $ 2,841,418 $ 217, , , ,046 $3,058, , , ,356 $ 3,181,963 See accompanying notes to financial statements

10 BALANCE SHEET GOVERNMENTAL FUNDS As of December 31, 2011 With Comparative Totals as of December 31, 2010 EXHIBIT III (CONTINUED) Total net assets reported for governmental activities in the statement of Net Assets are different from the amount reported as total government funds' fund balance because: 2011 Total Gov't. Funds 2010 Totals (Memorandum Only) Total fund balances from prior page $ 627,046 $ 693,356 Capital assets used in government activities are not financial resources and therefore are not reported in the fund statements. Amounts reported for governmental activities in the Statement of Net Assets are: Governmental capital assets $ 5,689,042 Governmental accumulated depreciation (2,125,007) 3,564,035 3,221,573 Long-term liabilities, including bonds and notes payable, are not due in the current period and therefore are not reported in the fund statements. Long-term liabilities reported in the Statement of Net Assets that are not reported in the Governmental Funds Balance Sheet are: General obligation debt (1,903,500) Unamortized debt discounts 37,741 Accrued interest on general obligation debt (24,524) Vested employee benefits (5,518) (1,895,801 ) (2,115,523) Total net assets - governmental activities $ 2,295,280 $ 1,799,406 See accompanying notes to financial statements

11 EXHIBIT IV Revenues: VILLAGE OF WEST BARABOO, WISCONSIN STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Year Ended December 31,2011 With Comparative Totals for Year Ended December 31, Major Funds Totals Debt TIF 2011 (Memorandum General Service District Totals Only) Taxes and special assessments $ 1,063,503 $ $ 238,333 $ 1,301,836 $ 1,315,216 Intergovernmental 200, , ,703 Licenses and permits 15,124 15,124 14,948 Public charges for services 9,407 9,407 18,666 Interest 5,546 5,546 6,636 Miscellaneous general revenues 10,108 10,108 1,448 Total revenues 1,304, ,044 1,543,543 1,551,617 Expenditures: Current: General govemment 164, , ,883 Public safety 225, , ,731 Public works 171, , ,060 Health and social services 20,226 20,226 16,305 Culture and recreation 25,736 25,736 16,885 Conservation and development 90,462 90,462 70,936 Capital outlay: General government 26,626 Public safety 25,193 Public works 214, ,975 23,630 Culture and recreation 959 Conservation and development 119, , ,093 29,135 Debt service: Principal retirement 219, , ,500 Interest and fiscal charges 55,739 65, , ,435 Total expenditures 1,033, , ,158 1,609,853 1,125,278 Excess (deficiency) of revenues over expenditures 271,443 (275,639) (62,114) (66,310) 426,339 Other financing sources (uses): Contribution to municipal utility (30,032) Transfers in from other funds 275, , ,364 Transfers out to other funds (275,639) (275,639) (267,364) Total other financing sources (uses) (275,639) 275,639 (30,032) Excess (deficiency) of revenues over expenditures and other sources (uses) (4,196) (62,114) (66,310) 396,307 Fund balance (deficit), January 1 1,880,542 (1,187,186) 693, ,049 Fund balance (deficit), December 31 $ 1,876,346 $ $ (1,249,300) $ 627,046 $ 693,356 See accompanying notes to financial statements. -8-

12 EXHIBIT IV (CONTINUED) VILLAGE OF WEST BARABOO, WISCONSIN RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2011 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: $ (66,310) Property taxes on assets of the municipality owned utilities are reported as they are received in the governmental fund statements. However, for governmental activities, those revenues are recorded as they are earned. Property taxes from municipally owned utilities received during the year Property taxes from municipally owned utilities earned during the year Amount by which property taxes earned is greater (less) than that which was received: $ (73,583) 73,583 The acquisition of capital assets are reported in the governmental funds as expenditures. However, for governmental activities those costs are shown shown in the Statement of Net Assets and allocated over their estimated useful lives as annual depreciation expenses in the Statement of Activities. Capital outlay reported in governmental fund statements Capital outlay reported in governmental fund statements not capitalized Depreciation expense reported in the Statement of Activities Amount by which capital outlays are greater (less) than depreciation in the current period: Vested employee benefits are reported in the governmental funds when amounts are paid. The Statement of Activities reports the value of benefits earned during the year. Special termination benefits paid in current year Special termination benefits earned in current year Amounts paid are greater (less) than amounts earned by: Repayment of principal on long-term debt is reported in the governmental funds as an expenditure, but is reported as a reduction in long-term debt in the Statement of Net Assets and does not affect the Statement of Activities. The amount of long-term debt principal payments in the current year is: In governmental funds, interest payments on outstanding long-term debt are reported as an expenditure when paid. In the Statement of Activities, interest is reported as incurred. The amount of interest paid during the current period The amount of interest accrued during the current period Interest paid is greater (less) than interest accrued by: In governmental funds, debt issue costs on outstanding long-term debt are reported as an expenditure when paid. In the Statement of Activities, debt issue costs are amortized and expensed over the life of the issue. The amount of debt issue costs paid during the current period The amount of debt issue costs recognized during the current period Debt issue costs paid is greater (less) than costs accrued by: 570,068 (31,666) (195,940) 1, ,685 (118,811) (4,647) 342,462 1, ,900 2,874 (4,647) Change in net assets - governmental activities $ 495,874 See accompanying notes to financial statements

13 EXHIBIT V VILLAGE OF WEST BARABOO, WISCONSIN STATEMENT OF NET ASSETS ENTERPRISE FUNDS As of December 31, 2011 With Comparative Totals as of December 31, 2010 ASSETS 2011 Municipal Water and Sewer Utility Current assets: Cash and cash equivalents $ 231,700 Cash and investments 208,792 Receivables: Customer accounts 109,389 Other 27,991 Inventories 27,615 Total current assets 605, Totals (Memorandum Only) $ 134, ,077 94,159 22,283 27, ,999 Restricted assets: Cash and investments 218,324 Total restricted assets 218, , ,423 Property, plant and equipment: Utility plant 6,305,723 Accumulated depreciation (920,200) Net property, plant and equipment 5,385,523 6,049,109 (830,956) 5,218,153 Other assets and debits: Unamortized debt discount 45,730 Deferred assets 376,736 Advances to other funds 855,001 Total other assets and debits 1,277,467 48, , ,001 1,373,543 Total assets $ 7,486,801 =$~==7=,2=9=3~, 1 =18~ See accompanying notes to financial statements

14 STATEMENT OF NET ASSETS ENTERPRISE FUNDS As of December 31, 2011 With Comparative Totals as of December 31, 2010 EXHIBIT V (CONTINUED) LIABILITIES 2011 Municipal Water and Sewer Utility Current liabilities (payable from current assets): Accounts payable $ 25,830 Due to other funds 404,973 Total current liabilities (payable from current assets) 430, Totals (Memorandum Only) $ 25, , ,071 Current liabilities (payable from restricted assets): Current portion of mortgage revenue bonds 117,019 Current portion of general obligation debt 19,681 Accrued interest payable 19,387 Total current liabilities (payable from restricted assets) 156, ,317 18,359 20, ,621 Long-term liabilities: General obligation debt 54,605 Mortgage revenue bonds 2,467,006 Total long-term liabilities 2,521,611 74,286 2,584,025 2,658,311 Total liabilities 3,108,501 3,004,003 NET ASSETS Invested in capital assets, net of related debt 2,727,212 Restricted for special purposes 198,937 Unrestricted 1,452,151 2,430, ,478 1,664,471 Total net assets 4,378,300 4,289,115 Total liabilities and net assets $ 7,486,801 $ 7,293,118 See accompanying notes to financial statements

15 EXHIBIT VI VILLAGE OF WEST BARABOO, WISCONSIN STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - ENTERPRISE FUNDS Year Ended December 31, 2011 With Comparative Totals for Year Ended December 31, Municipal Water and Sewer utility 2010 Totals (Memorandum Only) Operating revenues: Sales of water $ 402,458 $ 358,346 Sewerage service fees 332, ,549 Other operating revenues 3,299 1,879 Total operating revenues 738, ,774 Operating expenses: Water: Operation and maintenance Depreciation Taxes Total water Sewer: Operation and maintenance Depreciation Taxes Total sewer Total operating expenses Operating income Nonoperating revenues (expenses): Interest income Interest on long-term debt Amortization of debt discount and expense Total nonoperating revenues (expenses) Net income (loss) before contributions and transfers 155,747 95,895 6, , ,873 44,759 3, , , ,522 4,953 (70,543) (3,164) (68,754) 162, ,060 58,927 3, , ,042 44,261 5, , , ,283 9,388 (61,219) (3,164) (54,995) 88,288 Contributed capital Municipal contribution Transfers: Tax equivalent Change in net assets Net assets, January 1 Net assets, December 31 $ 718,991 30,032 (73,583) (56,245) 89, ,066 4,289,115 3,508,049 4,378,300 $ 4,289,115 :::::::::===== See accompanying notes to financial statements

16 EXHIBIT VII VILLAGE OF WEST BARABOO, WISCONSIN STATEMENT OF CASH FLOWS (DIRECT APPROACH) - ENTERPRISE FUNDS Year Ended December 31,2011 With Comparative Totals for Year Ended December 31, 2010 Cash flows from operating activities: 2011 Municipal Water and Sewer Utility Cash received from customers $ 717,808 Cash paid to suppliers for goods and services (229,934) Cash payments to employees for services (91,605) Cash received from (paid to) other funds for services 235,063 Cash paid for taxes (6,450) Net cash provided (used) by operating activities 624,882 Cash flows from noncapital financing activities: Cash paid for tax equivalent (73,583) Cash paid for maintenance of water tower Net cash provided (used) by noncapital financing activities (73,583) Cash flows from investing activities: Purchase of investments (4,616) Interest income 4,953 Net cash provided (used) by investing activities 337 Cash flows from capital and related financing activities: Proceeds from long-term debt Principal paid on long-term debt (129,676) Interest and finance charges paid on long-term debt (72,101) Payments received on advances 55,000 Contributed capital Acquisition and construction of capital assets (308,024) Net cash provided (used) by capital and related financing activities (454,801 ) Net increase (decrease) in cash and cash equivalents 96,835 Cash and cash equivalents, January 1 134,865 Cash and cash equivalents, December 31 $ 231, Totals (Memorandum Only) $ 653,330 (291,694) (101,835) (330,845) (6,450) (77,494) (56,245) (121,895) (178,140) (9,142) 9, ,342 (92,067) (59,063) 118, ,491 (977,492) 341,574 86,186 48,679 $ 134,865 See accompanying notes to financial statements

17 STATEMENT OF CASH FLOWS (DIRECT APPROACH) - ENTERPRISE FUNDS Year Ended December 31, 2011 With Comparative Totals for Year Ended December 31, 2010 EXHIBIT VII (CONTINUED) Reconciliation of operating income (loss) to net cash flows from operating activities: 2011 Municipal Water and Sewer utility Operating income $ 231,522 Depreciation 140,654 Amortization of Sewer Utility investment in Baraboo plant 20,498 Amortization of maintenance of water tower 17,414 (Increase) decrease in current assets: Customer accounts receivable (15,230) Other receivables (5,l08) Due from other funds Materials and supplies inventories Increase (decrease) in current liabilities: Accounts payable 669 Due to other funds 235,063 Net cash flows from operating activities $ 624,882 Supplementary schedule: Noncash capital and related financing transactions: Contributed capital $ Plant additions $ 2010 Totals (Memorandum Only) $ 143, ,188 t- 22,818 17,.414 (13,779) (8,665) 13,306 2,038 (12,946) (344,151 ) $ (77,494) $ 37,532 (37,532) $ See accompanying notes to financial statements

18 EXHIBIT VIII VILLAGE OF WEST BARABOO, WISCONSIN FIDUCIARY FUNDS STATEMENT OF NET ASSETS As of December 31, 2011 With Comparative Totals as of December 31, 2010 ASSETS 2011 Tax Agency Fund Cash and cash equivalents $ 561,319 Receivables: Taxes 877,037 Total assets $ 1,438, Totals (Memorandum Only) $ 537, ,328 $ 1,504,145 LIABILITIES AND NET ASSETS Due to other governments $ 1,438,356 Total liabilities 1,438,356 $ 1,504,145 1,504,145 Net assets Total liabilities and net assets $ 1,438,356 $ 1,504,145 See accompanying notes to financial statements

19 NOTES TO FINANCIAL STATEMENTS

20 Note 1. A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. VILLAGE OF WEST BARABOO, WISCONSIN INDEX TO NOTES TO FINANCIAL STATEMENTS December 31, 2011 PAGE Summary of Significant Accounting Policies Reporting Entity Basis of Financial Statement Presentation Basis of Accounting Measurement Focus Cash and Investments Inventories and Prepaid Items Capital Assets Interfund Receivables and Payables Allowance for Uncollectible Accounts Compensated Absences and Other Employee Benefit Amounts Long-Term Obligations Other Assets Claims and Judgments Interfund Transactions Equity Classifications Basis for Existing Rates - Proprietary Funds Subsequent Events Note 2. A. B. C. D. Stewardship, Compliance, and Accountability Budgetary Information Excess Expenditures Over Appropriations Deficit Balances Bond Covenant Disclosure Note 3. A. B. C. D. E. F. G. H. I. J. K. Detailed Notes on All Funds Cash and Investments Receivables Restricted Assets Capital Assets Interfund Receivables/Payables and Transfers Due to Other Governments Deferred Revenues Long-Term Obligations Lease Disclosures Governmental Activities Net Assets Governmental Fund Balances Employees Retirement System L. M. Status of Tax Incremental Financing District N. Concentrations Note 4. Other Information A. Commitments and Contingencies B. Risk Management C. Subsequent Event

21 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Village of West Baraboo conform to generally accepted accounting principles as applicable to governmental units. A. REPORTING ENTITY This report includes all of the funds of the Village of West Baraboo. The reporting entity for the Village consists of (a) the primary government, (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. The primary government is financially accountable if it appoints a voting majority of the organization's governing body and (1) it is able to impose its will on that organization or (2) there is a potential for the organization to provide specific financial benefits to or burdens on the primary government. The primary government may be financially accountable if an organization is fiscally dependent on the primary government. This report does not contain any component units. B. BASIS OF FINANCIAL STATEMENT PRESENTATION Government-Wide Financial Statements The Statement of Net Assets and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish between governmental and business-type activities. The effect of interfund activity, within the governmental and business-type activities columns, has been removed from these statements. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The Village does not allocate indirect expenses to functions in the statement of activities. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. Change in Accounting Principle The Village adopted the provisions of Governmental Accounting Standards Board (GAS B) Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions" in the current year. GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to honor constraints on the specific purposes for which those funds can be spent. While the classifications of fund balance in the Village's various governmental funds were revised, the implementation of this standard had no effect on total fund balance. For detailed information on fund balances of governmental funds, see Note 3.K

22 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. BASIS OF FINANCIAL STATEMENT PRESENTATION (Continued) Fund Financial Statements Fund financial statements of the reporting entity are organized into funds each of which are considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, liabilities, fund equity, revenues, and expenditures. Funds are organized as major funds or nonmajor funds within the govemmental and fiduciary statements. An emphasis is placed on major funds within the governmental category. A fund is considered major if it is the primary operating fund of the Village or meets the following criteria: a. Total assets, liabilities, revenues, or expenditures of that individual governmental fund are at least 10 percent of the corresponding total for all funds of that category or type, and b. Total assets, liabilities, revenues or expenditures of the individual governmental fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. c. In addition, any other governmental fund that the Village believes is particularly important to financial statement users may be reported as a major fund. Governmental Funds Governmental funds are those funds through which most governmental functions are typically financed. The measurement focus of governmental funds is on the sources, uses and balance of current financial resources. The Village has presented the following governmental funds: General Fund - The General Fund is the Village's primary operating fund and is always classified as a major fund. It is used to account for and report all financial resources not accounted for and reported in another fund. Debt Service Fund - The Debt Service Fund is used to account for and report the financial resources that are restricted, committed or assigned to expenditure for principal and interest. Capital Projects Fund (TIF) - The Capital Projects Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays (other than those financed by proprietary funds and trust funds). The Village reports the following major governmental funds: General Fund Debt Service Fund Tax Incremental Financing District Fund The Village does not report any non major funds

23 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. BASIS OF FINANCIAL STATEMENT PRESENTATION (Continued) Proprietary Funds Proprietary Funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives are determinations of net income, financial position and cash flow. The Village reports the following major proprietary funds: Water Utility - Accounts for providing water service Sewer Utility - Accounts for providing sewer service Fiduciary Funds (Not included in Government-Wide Statements) Agency Funds - Agency Funds are used to account for assets held by the Village in a trustee capacity or as an agent for individuals, private organizations, and/or other governmental units. The Village's Agency Fund accounts for the transactions pertaining to the Village's tax appropriation. C. BASIS OF ACCOUNTING The government-wide financial statements and fund financial statements for the proprietary funds are presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned, and expenses are recognized at the time the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred revenue. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Unbilled receivables are recorded as revenues when services are provided. The proprietary funds follow all pronouncements of the Governmental Accounting Standards Board, and have elected not to follow Financial Accounting Standards Board pronouncements issued after November 30, The proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Water Utility and the Sewer Utility are charges to customers for providing service to the Village's residents and businesses. Operating expenses for proprietary funds include the cost of providing these services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses

24 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. BASIS OF ACCOUNTING (Continued) The modified accrual basis of accounting is followed by the governmental funds. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the Village considers revenues to be available if they are collected within 90 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences, and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources. Property taxes are levied in December on the assessed value as of the prior January 1. In addition to property taxes for the Village, taxes are collected for and remitted to the state and county governments as well as the local school district and technical college district. Taxes for all state and local governmental units billed in the current year for the succeeding year are reflected as receivables and due to other taxing units on the accompanying agency fund statement of fiduciary net assets. The Village's property taxes are levied on or before December 31 on the equalized valuation as of the prior January 1 for all general property located in the Village. The taxes are due and payable in the following year. Property taxes are recorded in the year levied as taxes receivable and deferred revenues. Property taxes are recognized in the appropriate fund as revenues in the succeeding year when they are collected and available to finance services. The aggregate amount of property taxes to be levied for Village purposes is determined according to provisions of Chapter 120 of the Wisconsin Statutes. Property taxes levied by the Village are certified to local taxing districts for collection. Property taxes attach as an enforceable lien as of January 1. Taxes are levied in December on the assessed value as of the prior January 1. Property tax calendar tax roll: Lien date and levy date Tax bills mailed Payment in full or first installment due Second installment due December, 2011 December, 2011 January 31,2012 July 31,2012 Delinquent real estate taxes as of July 31 are paid in full by the county, which assumes the collection thereof. No provision for uncollectible accounts receivable has been made for the water and sewer utilities because they have the right by law to place substantially all delinquent bills on the tax roll, and other delinquent bills are generally not significant

25 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. BASIS OF ACCOUNTING (Continued) Intergovernmental aids and grants are recognized as revenues in the period the Village is entitled to the resources and the amounts are available. Amounts owed to the Village which are not available are recorded as receivables and deferred revenues. Amounts received prior to the entitlement period are also recorded as deferred revenues. Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services, and interest. Other general revenues such as fines and forfeitures, inspection fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. For governmental fund financial statements, deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues also arise when resources are received before the Village has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the Village has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. D. MEASUREMENT FOCUS On the Government-Wide Statement of Net Assets and Statement of Activities, governmental activities are presented using the economic resources measurement focus. Under this concept, revenues and expenses are matched using the accrual basis of accounting. The measurement focus of all governmental funds is the flow of current financial resources concept. Under this concept, sources and uses of financial resources, including capital outlays, debt proceeds and debt retirements are reflected in operations. Resources not available to finance expenditures and commitments of the current period are recognized as deferred revenue or a reservation of fund equity. Liabilities for claims, judgments, compensated absences and pension contributions which will not be currently liquidated using expendable available financial resources are included as liabilities in the government-wide financial statements but are excluded from the governmental fund financial statements. The related expenditures are recognized in the governmental fund financial statements when the liabilities are liquidated

26 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) E. CASH AND INVESTMENTS The Village's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from date of acquisition. Cash and investment balances for individual funds are pooled unless maintained in segregated accounts. Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on quoted market prices. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Restricted Assets Mandatory segregations of assets are presented as restricted assets. Such segregations are required by bond agreements and other external parties. Current liabilities payable from these restricted assets are so classified. The excess of restricted assets over current liabilities payable from restricted assets will be used first for retirement of related long-term debt. The remainder, if generated from earnings, is shown as restricted net assets. F. INVENTORIES AND PREPAID ITEMS Governmental fund inventory items are charged to expenditure accounts when purchased. Yearend inventory was not significant. Enterprise funds inventories are generally used for construction and for operation and maintenance work. They are not for resale. They are valued at cost based on weighted average, and charged to construction, operation and maintenance expense when used. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. G. CAPITAL ASSETS Government-Wide Statements In the government-wide financial statements, fixed assets are accounted for as capital assets. Capital assets are defined by the government as assets with an initial cost of more than $3,500 for general capital assets and $5,000 for infrastructure assets, and an estimated useful life in excess of one year. All capital assets are valued at historical cost, or estimated historical cost if actual amounts are unavailable. Donated fixed assets are recorded at their estimated fair value at the date of donation

27 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. CAPITAL ASSETS (Continued) Government-Wide Statements (Continued) Prior to January 2004, infrastructure assets of governmental funds were not capitalized. Upon implementing GASB 34, governmental units are required to account for all capital assets, including infrastructure, in the government-wide statements prospectively from the date of implementation. Retroactive reporting of all major general infrastructure assets is encouraged but not required. The Village has elected to retroactively report fund infrastructure. Additions to and replacements of capital assets of business-type activities are recorded at original cost, which includes material, labor, overhead, and an allowance for the cost of funds used during construction when significant. For tax-exempt debt, the amount of interest used capitalized equals the interest expense incurred during construction netted against any interest revenue from temporary investment of borrowed fund proceeds. There was no interest capitalized during the current year. The cost of renewals and betterments relating to retirement units is added to plant accounts. The cost of property replaced, retired or otherwise disposed of, is deducted from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated depreciation. Depreciation of all exhaustible fixed assets is recorded as an allocated expense in the statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: Land improvements Buildings and building improvements Machinery and equipment Infrastructure Utility plant 20 years years 5-20 years 30 years years Fund Statements In the fund financial statements, fixed assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Fixed assets used in enterprise fund operations are accounted for the same as in the government-wide statements. H. INTERFUND RECEIVABLES AND PAYABLES During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds". Interfund receivables and payables between funds within governmental activities are eliminated in the Statement of Net Assets

28 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS No allowance for uncollectible accounts has been recorded as all amounts are considered collectible. J. COMPENSATED ABSENCES AND OTHER EMPLOYEE BENEFIT AMOUNTS Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide, enterprise, and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, or are payable with expendable available resources. Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at December 31, 2011 are determined on the basis of current salary rates and include salary related payments. K. LONG-TERM OBLIGATIONS All long-term debt to be repaid from governmental and business-type resources are reported as liabilities in the government-wide statements. The long-term debt consists primarily of notes and bonds payable, and accrued compensated.absences. Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payments of principal and interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the government-wide statements. For the government-wide statements and proprietary fund statements, bond premiums and discounts are deferred and amortized over the life of the issue using the straight-line method. Gains or losses on prior refundings are amortized over the remaining life of the old debt, or the life of the new debt, whichever is shorter. The balance at year end for both premiums/discounts and gains/losses, as applicable, is shown as an increase or decrease in the liability section of the balance sheet. The Village does not engage in conduit debt transactions. L. OTHER ASSETS In governmental funds, debt issuance costs are recognized in the current period. For the government-wide financial statements, governmental activity debt issuance costs are amortized over the life of the debt issue

29 NOTES TO FINANCIAL STATEMENTS December 31, 2011 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. CLAIMS AND JUDGMENTS Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. Claims and judgments that would normally be liquidated with expendable available financial resources are recorded during the year as expenditures in the governmental funds. If they are not to be liquidated with expendable available financial resources, no liability is recognized in the governmental fund statement. The related expenditure is recognized when the liability is liquidated. Claims and judgments are recorded in the government-wide financial statements as expense when the related liabilities are incurred. There were no significant claims or judgments at year end. N. INTERFUND TRANSACTIONS Quasi-external transactions are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. All other interfund transactions, except quasi-external transactions and reimbursements, are reported as transfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equity transfers. All other interfund transfers are reported as operating transfers. O. EQUITY CLASSIFICATIONS Government-Wide Statements Equity is reported as net assets and displayed in three components: a. Invested in capital assets, net of related debt - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds are not included in the calculation of invested in capital assets, net of related debt. b. Restricted net assets - Consists of new assets with constraints placed on the use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. c. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt". When both restricted and unrestricted resources are available for use, it is the Village's policy to use restricted resources first, then unrestricted resources as they are needed